Game-changer cash transfer scheme in 20 districts from Jan 1: FM

"The scheme will be rolled out in 11 more districts from February 1 and in 12 additional districts from March 1," Finance Minister Chidambaram said.

Adopting caution, the government today scaled down the the launch of its ambitious direct cash transfer scheme tomorrow to 20 districts instead of 43 as planned earlier, keeping LPG also out of its ambit for now.

Touted as a "game changer", the programme, will cover a select 26 schemes like educational scholarship for SC/ST and OBC and widow pension. Food, fertilisers, diesel and kerosene have already been kept out.

Addressing the media on the eve of the roll out, finance minister P Chidambaram, said the programme was being launched on Tuesday only in 20 districts in 6 States and three Union Territories because the government wanted to move cautiously.

"We are proceeding with a great degree of caution... We will look at transferring all subsidies and benefit through this scheme but we have to do it slowly. We are not going to rush into anything and then find that the system cannot cope with it," he said.

Among the reasons why the launch was scaled down were all beneficiaries not having bank account to receive cash and inadequate Aadhaar enrolment.

The government had originally identified 51 districts across 16 states to be covered by the programme under which cash subsidy benefit will directly go to the bank account of beneficiaries with mandatory requirement of Aadhaar number.

Subsequently, four districts each of Himachal Pradesh and Gujarat were exempted from the roll out tomorrow because of assembly elections.

The States to be covered in the initial phase are Karnataka, Andhra Pradesh, Delhi, Rajasthan, Madhya Pradesh and Punjab and UTs of Puducherry, Chandigarh and Daman and Diu.

This will be extended to 11 more districts from February 1 in states including Kerala, Haryana, Sikkim, Goa, Maharashtra and Jharkhand and 12 more districts in states including Tripura from March 1.

Chidambaram, however, said, that at this stage "there is no intention" to transfer the subsidies for food, fertiliser, diesel and kerosene through DBT.

The Finance Minister said that Direct Benefit Transfer (DBT) will check leakages and corruption in subsidies distribution.

Chidambaram said the direct cash benefit transfer will be rolled out in whole country by the end of 2013.

"This (DBT) is indeed a game-changer for governance, the manner in which we govern. This is a game-changer in which we account for money. It is game changer in the manner in which the benefit reaches the beneficiary without any intermediation by any human being," he said.

"These are complex issues. They have to be studied carefully and only when we are completely satisfied that they are amenable to transfer through DBT, we will think of that," the Minister said, adding that subsidy on LPG also would not be provided through DBT in the first phase.

Chidambaram further said all the beneficiaries will get the cash transfer in their bank accounts, even if they do not have the Aadhaar numbers.

He said: "Over the next few days or weeks we will aim at 100% penetration of Aadhaar beneficiaries ... Whether there is Aadhaar card or not, money will be credited, money will be withdrawn (by beneficiary)."